Fannie, Freddie Deal Will 'Stem the Mess'
'There will be no reason to foreclose' after takeover: Cramer
By Kevin Spak,  Newser Staff
Posted Sep 6, 2008 6:42 PM CDT
Jim Cramer, host of CNBC's Mad Money, attends the opening bell of the Nasdaq stock market on Wednesday, Jan. 16, 2008 in New York.    (AP Photo/Mark Lennihan)
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(Newser) – Jim Cramer predicts that a lot of people will whine about the federal takeover of Fannie Mae and Freddie Mac—especially those shorting them—and say it won't help. But they're dead wrong, Cramer writes on it's going to turn housing around and bring the rest of the economy with it. “Put simply, there will be no reason to foreclose” once Treasury gets involved.

The economy tanked because trillions of dollars were wagered on house appreciation, leading to “a financial Armageddon quality we have not seen EVEN IN THE GREAT DEPRESSION,” Cramer writes. But when feds hold the mortgage papers, “ANYTHING can be worked out.”  And, he says, "With mortgage paper turned into federal paper, the holders worldwide, from Russia to China to Europe, will be made whole. The world will rally and something good, at last, will occur."